Malaysia: Standardized PSC drives fair competition for airports

The decision to align the Passenger Service Charge (PSC) fees between the Kuala Lumpur International Airport (KLIA) and Kuala Lumpur International Airport 2 (klia2) was to drive better competition between the carriers operating at both terminals.

The decision was handed down by Malaysia Airport Holdings Bhd (MAHB), which in a statement said that klia2 is considered to be a low-cost airport terminal, but rather, a second permanent terminal for KLIA that would help facilitate the airport’s future growth.

MAHB was answering a claim by DAP’s Tony Pua that the Malaysian Aviation Commission’s (MAVCOM) ruling to equalize the fees charged by klia2 as a low-cost terminal and KLIA was excessive, as the quality of service at klia2 was not as good compared to that of KLIA.

MAHB said the standardized PSC charges also puts Malaysia in a position to be better aligned with international standards, including the International Civil Aviation Organization (ICAO) principle of non-discriminatory pricing at airports.

“In January 2017, the government made the decision to equalize the PSC for all airports in Malaysia following an extensive study on aviation charges across industry, conducted by MAVCOM,” the statement said.

MAHB said the PSC rate mechanism was founded on a network and cross-subsidization model to allow it to operate airports in locations that were not moneymaking, such as those with short take-off and landing ports.

“The same model applies to all other aeronautical charges as well, such as landing and parking charges for aircraft.

“For example, the same rate applies in Lahad Datu Airport and in KLIA, regardless of the differences in the facilities,” it explained.

MAHB also said that the PSC rate was autonomous of the expenses that come with the development of an airport.

“Although other countries charge passengers a separate airport development fee in addition to the PSC, this is not the case in Malaysia. Our PSC rates remain one of the cheapest in the region and in the world, even after the full equalization,” it added.